Time to Bail Out of Frequent-Flier Programs

  • Posted by a hidden member.
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    Mar 01, 2014 5:44 PM GMT
    Fly one mile, get one frequent-flier mile in return.

    For decades, this has been the deal that the biggest airlines made with passengers. But this week, Delta Air Lines became the first among the three biggest airlines in the United States to base rewards on what a passenger pays for a ticket, not the number of miles flown.

    Starting in 2015, fliers will earn five to 11 miles for every dollar they spend, depending on their elite status level. Delta hopes to reward the people who spend the most and promises to make redeeming the miles for free flights easier for everyone. But a sizable number of its passengers, those who fly longer distances and for cheaper fares, may earn fewer miles under the new system.

    This is one of those seismic changes that comes along in the world of customer loyalty programs every few years and prompts a couple of basic questions: What is the nature of this game that so many of us are playing? What does it mean to win now? And is it time to quit?

    http://www.nytimes.com/2014/03/01/your-money/credit-and-debit-cards/now-may-be-a-good-time-to-bail-out-of-frequent-flier-programs.html?ref=business&_r=0
  • madsexy

    Posts: 4843

    Mar 01, 2014 11:09 PM GMT
    woodsmen saidFly one mile, get one frequent-flier mile in return.

    For decades, this has been the deal that the biggest airlines made with passengers. But this week, Delta Air Lines became the first among the three biggest airlines in the United States to base rewards on what a passenger pays for a ticket, not the number of miles flown.

    Starting in 2015, fliers will earn five to 11 miles for every dollar they spend, depending on their elite status level. Delta hopes to reward the people who spend the most and promises to make redeeming the miles for free flights easier for everyone. But a sizable number of its passengers, those who fly longer distances and for cheaper fares, may earn fewer miles under the new system.

    This is one of those seismic changes that comes along in the world of customer loyalty programs every few years and prompts a couple of basic questions: What is the nature of this game that so many of us are playing? What does it mean to win now? And is it time to quit?

    http://www.nytimes.com/2014/03/01/your-money/credit-and-debit-cards/now-may-be-a-good-time-to-bail-out-of-frequent-flier-programs.html?ref=business&_r=0

    I have a friend who's a very frequent flyer for his job and is tuned into at least four mile-reward frequent flyer programs and several hotel programmes. He told me two years ago that United started down this path with some of the additional perks awarded to members in the form of upgrade certificates which became based on spend, not miles, and then last year they made their premium tiers based on meeting both miles-minimums and spend-minimums. He didn't give me as much detail (and I know that wasn't much, but it's all I remember) on American and U. S. Air, but said both of those were beginning to impose spend-minimum quotients into their programmes, too. Delta is, apparently, the most overt. But credit cards have been basing loyalty programs on spend forever (by necessity), so seems more of a norming adjustment than a sea change. And the alternative is no reward (if you don't participate in a frequent flyer or frequent stayer or frequent buyer programme, so that's just being stupid and not taking the reward you get for free just for having a number. Also, a couple of years ago Starbucks revamped its loyalty programme, and the rewards changed to HALF what they were before, and that's if you play it just right, usually less than that. Nobody even made a peep - Starbucks has that much monopoly!
  • Suetonius

    Posts: 1842

    Mar 02, 2014 5:09 AM GMT
    I bailed on United some time ago. I will use up my accumulated miles to the extant I can, but in the future, will take the cheapest or most convenient flight, regardless of carrier. United screwed its frequent flyers, and so, except for those that fly 100,000 miles a year or so, there is no more loyalty to United. As for the credit cards that give airline miles - I now use a card that gives cash back as much as I can - Who needs more worthless miles?

    And with the Explorer credit card (which I never use), I still get the one free bag, and get to board with the medium level frequent flyers. And United has lousy service now, ever since the takeover by Continental - gone from being one of the best airlines to one of the worst. Might as well be AirIndia or AirKazakstahn -
  • Posted by a hidden member.
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    Mar 02, 2014 6:44 AM GMT
    Pfft. Well, it's not like airlines are making a profit. They're buying new airframes as fast as they can as fuel prices will never go back down to '80s levels. Their customers are cutting back on last-minute flights and travel in general. Something has to give.

    In case you haven't noticed, bereavement flight discounts are also disappearing.

    Until we make reclining seats(yes, you..), carryon luggage, and loud kids as illegal as carryon firearms, get your frequent flyer account because it makes it easy to check in online.

    Don't expect the reward to be the same as cash. They have none left to give you.

    Get a prescription for Xanax. Drug yourself to sleep for the flight. Only extreme turbulence can make it a disappointing flight.

    Makes Southwest manageable...since AlaskaAirlines dropped all the routes I needed to get there and back in the same day.

    Ok, Alaska, you taught me what a joke it is to pay $50 to check my luggage... I will get stuck behind some retard from India who's indignant over the entire concept...for half a fucking hour.

    I hate being 6'2". I hate luggage and flying thru Seatac. Why do you ask?
  • Posted by a hidden member.
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    Mar 02, 2014 6:56 AM GMT
    This is no surprise really.

    Fares will continue to climb and frequent fliers will get less. Why? Airlines are finally waking the f**k up.

    The airline industry, as a whole, has *never* made a profit since its inception. The new norm will be higher fares for service and "affordable" fares for a seat.

    I suspect the industry will continue to consolidate for some time especially now given the extreme pilot shortage and the regional airline business model that is literally on the brink of collapsing.

  • madsexy

    Posts: 4843

    Mar 02, 2014 3:28 PM GMT
    Suetonius saidI bailed on United some time ago. I will use up my accumulated miles to the extant I can, but in the future, will take the cheapest or most convenient flight, regardless of carrier. United screwed its frequent flyers, and so, except for those that fly 100,000 miles a year or so, there is no more loyalty to United. As for the credit cards that give airline miles - I now use a card that gives cash back as much as I can - Who needs more worthless miles?

    And with the Explorer credit card (which I never use), I still get the one free bag, and get to board with the medium level frequent flyers. And United has lousy service now, ever since the takeover by Continental - gone from being one of the best airlines to one of the worst. Might as well be AirIndia or AirKazakstahn -

    You're wrong about the merger - United took over Continental. All the core ops of United survived - the Continental did not. Most of the online forums say Continental was like Lord & Taylor before the merger and now is like Costco. icon_eek.gif
  • Suetonius

    Posts: 1842

    Mar 02, 2014 8:08 PM GMT
    madsexy said
    Suetonius saidI bailed on United some time ago. I will use up my accumulated miles to the extant I can, but in the future, will take the cheapest or most convenient flight, regardless of carrier. United screwed its frequent flyers, and so, except for those that fly 100,000 miles a year or so, there is no more loyalty to United. As for the credit cards that give airline miles - I now use a card that gives cash back as much as I can - Who needs more worthless miles?

    And with the Explorer credit card (which I never use), I still get the one free bag, and get to board with the medium level frequent flyers. And United has lousy service now, ever since the takeover by Continental - gone from being one of the best airlines to one of the worst. Might as well be AirIndia or AirKazakstahn -

    You're wrong about the merger - United took over Continental. All the core ops of United survived - the Continental did not. Most of the online forums say Continental was like Lord & Taylor before the merger and now is like Costco. icon_eek.gif

    United took over Continental in name only. The management is Continental's, and all the reservations systems are continental's (which is why nothing worked well for a long time after the merger). You can go to Flyertalk.com and read the 1000's of messages/complaints on the subject.
  • madsexy

    Posts: 4843

    Mar 03, 2014 2:16 AM GMT
    Suetonius said
    madsexy said
    Suetonius saidI bailed on United some time ago. I will use up my accumulated miles to the extant I can, but in the future, will take the cheapest or most convenient flight, regardless of carrier. United screwed its frequent flyers, and so, except for those that fly 100,000 miles a year or so, there is no more loyalty to United. As for the credit cards that give airline miles - I now use a card that gives cash back as much as I can - Who needs more worthless miles?

    And with the Explorer credit card (which I never use), I still get the one free bag, and get to board with the medium level frequent flyers. And United has lousy service now, ever since the takeover by Continental - gone from being one of the best airlines to one of the worst. Might as well be AirIndia or AirKazakstahn -

    You're wrong about the merger - United took over Continental. All the core ops of United survived - the Continental did not. Most of the online forums say Continental was like Lord & Taylor before the merger and now is like Costco. icon_eek.gif

    United took over Continental in name only. The management is Continental's, and all the reservations systems are continental's (which is why nothing worked well for a long time after the merger). You can go to Flyertalk.com and read the 1000's of messages/complaints on the subject.

    Well, color me embarrassed. I knew tons of guys who worked for United in Chicago when I lived there, and all they talked about was how they were "forcing Continental to conform"! WTF! I looked it up - 7 of the 22 SVPs and above listed as United management were United before and 15 were Continental. Weird, considering the passengers' comments I've read which all say Continental was much nicer/better than United and now isn't. Good thing I'm not in the airline industry and more informed about higher education! icon_redface.gif
  • Posted by a hidden member.
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    Mar 03, 2014 3:00 AM GMT
    I left OnePass from Continental when United took over, and haven't turned back since. With my extensive company and personal travel, I remain a One World Sapphire member. I belong to British Airways Executive Club, but fly American domestically.

    Cheers,

    Sean
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    Mar 04, 2014 2:35 AM GMT
    Delta has been very clear about their new policy.
    They reward you for the amount of money you've spent, not the number of miles you've flown.
    Sounds fair to me.

    When I get a cheap fair on a long distance flight I feel like I've already gotten my reward. When I'm forced to pay a high fare it's good to know that at least I'm getting ff miles.
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    Mar 04, 2014 5:09 PM GMT
    exposure2 saidDelta has been very clear about their new policy.
    They reward you for the amount of money you've spent, not the number of miles you've flown.
    Sounds fair to me.

    When I get a cheap fair on a long distance flight I feel like I've already gotten my reward. When I'm forced to pay a high fare it's good to know that at least I'm getting ff miles.


    For our sake , i hope that all our passengers are going to react as you did ! icon_smile.gif
  • madsexy

    Posts: 4843

    Mar 04, 2014 5:11 PM GMT
    neffa said
    exposure2 saidDelta has been very clear about their new policy.
    They reward you for the amount of money you've spent, not the number of miles you've flown.
    Sounds fair to me.

    When I get a cheap fair on a long distance flight I feel like I've already gotten my reward. When I'm forced to pay a high fare it's good to know that at least I'm getting ff miles.


    For our sake , i hope that all our passengers are going to react as you did ! icon_smile.gif

    Likely not. Then again, how often does someone really have a choice of airline? With the consolidations now there aren't that many choices, so is there really much overlap in routes?
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    Mar 04, 2014 5:17 PM GMT
    Suetonius said...United screwed its frequent flyers, and so, except for those that fly 100,000 miles a year or so, there is no more loyalty to United. ...


    Its frequent fliers? You should have seen what UAL did to its stockholders a decade or two ago! "Marmoreum accepi, latericium relinquo."
  • Suetonius

    Posts: 1842

    Mar 04, 2014 5:22 PM GMT
    MGINSD said
    Suetonius said...United screwed its frequent flyers, and so, except for those that fly 100,000 miles a year or so, there is no more loyalty to United. ...


    Its frequent fliers? You should have seen what UAL did to its stockholders a decade or two ago! "Marmoreum accepi, latericium relinquo."

    UAL didn't screw its stockholders - it was in bankruptcy (due to poor management) - what happened to shareholders was required by the Bankruptcy law.
  • Posted by a hidden member.
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    Mar 04, 2014 5:34 PM GMT
    Suetonius said
    MGINSD said
    Suetonius said...United screwed its frequent flyers, and so, except for those that fly 100,000 miles a year or so, there is no more loyalty to United. ...


    Its frequent fliers? You should have seen what UAL did to its stockholders a decade or two ago! "Marmoreum accepi, latericium relinquo."

    UAL didn't screw its stockholders - it was in bankruptcy (due to poor management) - what happened to shareholders was required by the Bankruptcy law.


    Yes, but the bankruptcy came AFTER they screwed us. "Think long term."
  • Suetonius

    Posts: 1842

    Mar 04, 2014 6:36 PM GMT
    MGINSD said
    Suetonius said
    MGINSD said
    Suetonius said...United screwed its frequent flyers, and so, except for those that fly 100,000 miles a year or so, there is no more loyalty to United. ...


    Its frequent fliers? You should have seen what UAL did to its stockholders a decade or two ago! "Marmoreum accepi, latericium relinquo."

    UAL didn't screw its stockholders - it was in bankruptcy (due to poor management) - what happened to shareholders was required by the Bankruptcy law.


    Yes, but the bankruptcy came AFTER they screwed us. "Think long term."

    Were you one of the UAL pilot owners?
  • Posted by a hidden member.
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    Mar 04, 2014 6:45 PM GMT
    When you sign up for frequent-flier programs, you are essentially giving up your privacy to allow them to mine personal information to better manage their business. That they change the quid pro quo is unfair.
  • madsexy

    Posts: 4843

    Mar 04, 2014 9:22 PM GMT
    woodsmen saidWhen you sign up for frequent-flier programs, you are essentially giving up your privacy to allow them to mine personal information to better manage their business. That they change the quid pro quo is unfair.

    How so? They already have all the same data about the flights we take.

    And all they're "taking" is a small portion of the reward the passenger used to get for his/her use of the airline, and passengers still get rewards. It's just now a model that makes more sense - rewards for the spend, which relates to the passengers' contribution to revenue. The reward based on miles was a mismatch to the economic model.
  • Posted by a hidden member.
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    Mar 04, 2014 9:28 PM GMT
    Here is Wikipedia on the use of credit card information in connection with frequent-flier programs: An additional method of accruing miles is credit cards bonuses and spending. Many issuers partner with airlines to offer a co-branded credit cards or offer the ability to transfer their proprietary points to an airline's program. It is not uncommon for the credit card issuers to offer large sign-up bonuses, among other incentives, to entice users to put purchases on their card. This allows infrequent travelers to be take advantage of various programs. It is not uncommon to accumulate enough miles for an award ticket without ever flying with an airline. Many people make a hobby of accruing large sums of miles. This can be done by signing up with many credit cards, optimizing which card you spend on, and taking advantage of various promotions.
  • madsexy

    Posts: 4843

    Mar 04, 2014 9:36 PM GMT
    woodsmen saidHere is Wikipedia on the use of credit card information in connection with frequent-flier programs: An additional method of accruing miles is credit cards bonuses and spending. Many issuers partner with airlines to offer a co-branded credit cards or offer the ability to transfer their proprietary points to an airline's program. It is not uncommon for the credit card issuers to offer large sign-up bonuses, among other incentives, to entice users to put purchases on their card. This allows infrequent travelers to be take advantage of various programs. It is not uncommon to accumulate enough miles for an award ticket without ever flying with an airline. Many people make a hobby of accruing large sums of miles. This can be done by signing up with many credit cards, optimizing which card you spend on, and taking advantage of various promotions.

    Correct. And only metadata about transaction category and volume is available to the airline for the purpose of granting the earned points. AND that model again proves the point - the premium earning on spends with the airline are based on those dollars spent. The other purchases' earnings are funded by the issuer (bought from the airline) so that the issuer's incentive to the cardholder to use it for everything not just for airline purchases at the premium earning rate is maintained. The affinity credit cards are all about the issuers' profit.
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    Mar 04, 2014 10:01 PM GMT
    I'm not worried. I'll still hit Premier 1K this year and after the shake out I just might get more upgrades out of San Francisco (on of the hardest hubs to get upgrades from).

    But, for sure, don't "bank" frequent flyer miles. They devalue as fast as the Zimbabwean Dollar.

    1024px-Zimbabwe_$100_trillion_2009_Obver

    Not related, but Zimbabwe stopped using their own currency in 2009 when it became futile to print their own money. They now use foreign currency within the country.
  • allatonce

    Posts: 904

    Mar 04, 2014 10:24 PM GMT
    GAMRican saidI'm not worried. I'll still hit Premier 1K this year and after the shake out I just might get more upgrades out of San Francisco (on of the hardest hubs to get upgrades from).

    But, for sure, don't "bank" frequent flyer miles. They devalue as fast as the Zimbabwean Dollar.

    1024px-Zimbabwe_$100_trillion_2009_Obver

    Not related, but Zimbabwe stopped using their own currency in 2009 when it became futile to print their own money. They now use foreign currency within the country.


    I got one of those bank notes when I visited there in 2012. Keep it as an awesome souvenir. Economists make for weird tourists sometimes I guess...
  • ChicagoSteve

    Posts: 1272

    Mar 05, 2014 1:14 AM GMT
    I don't fly enough anymore to rack up miles like I used to. At one point I was AAdvantage Platinum with American but then had a job change. I still fly AA for all my trips though. On my most recent trip last week, when I flew back home from LA-Chicago I did a paid upgrade to First Class. When I did online check-in the day before it offered an upgrade for $150.00 dollars. I thought that was cheap actually and it was worth it.
  • madsexy

    Posts: 4843

    Mar 05, 2014 1:20 AM GMT
    allatonce said
    GAMRican saidI'm not worried. I'll still hit Premier 1K this year and after the shake out I just might get more upgrades out of San Francisco (on of the hardest hubs to get upgrades from).

    But, for sure, don't "bank" frequent flyer miles. They devalue as fast as the Zimbabwean Dollar.

    1024px-Zimbabwe_$100_trillion_2009_Obver

    Not related, but Zimbabwe stopped using their own currency in 2009 when it became futile to print their own money. They now use foreign currency within the country.


    I got one of those bank notes when I visited there in 2012. Keep it as an awesome souvenir. Economists make for weird tourists sometimes I guess...

    When I was a kid my parents gave us some high-denomination Japanese Yen and Italian Lire, but that's just awesome! I wish I had me one of those!

    EDIT: eBay - $9.95 - SCORE! Now I'll FEEL rich anyway!